Member Article

Troubled Teesside plant bought for £11.6m

A troubled Teesside biofuels plant has been snapped up by a German firm which is pledging to throw £50m into giving it a new lease of life.

Ensus, based on the Wilton site near Redcar, has been bought by CropEnergies AG in a £11.6m share deal.

The plant, which cost £250m to build, went offline for a second time in May 2011, for “a number of business and economic reasons”, and the shutdown last 15 months.

The plant stopped production for the third time in three years in April this year, citing “slow development” of the UK and European markets for green bioethanol, rising gas prices and last year’s poor wheat harvest.

Redcar Lib Dem MP Ian Swales said: “This sale looks like the best outcome for jobs and the local economy.

“I am especially pleased at the news that £50m will be invested in the plant to make it even more competitive.

“Ensus invested heavily to solve the odour problem and I’m sure the new owners will also want to be good neighbours for the local community.”

The facility, which is one of the world’s largest bioethanol plants, is scheduled to restart once essential maintenance work is completed.

Ensus has been beset by difficulties since before it came online in early 2010.

Strong smells coming from its giant chimney stacks affected residents living nearby, forcing bosses to stop production just weeks after opening, and £6m was spent on the problem.

Market conditions for the highly sustainable bioethanol the plant produces have also been slow to catch up.

Ensus chief executive officer Peter Sopp said: “Ensus will become a key part of CropEnergies production network.

“CropEnergies brings huge expertise and experience in this field, as well as a strong commitment to invest further in the Ensus operations in the UK.

“It is great news for our employees, customers and suppliers.”

Mr Sopp added: “They have been magnificent throughout some really challenging years, showing great loyalty and patience at times when the plant has been off line.

“This puts us on a much stronger footing and means we can look to the future with real confidence.”

The deal was completed through the issue of 2.25 million new CropEnergies shares, priced at 5.98 euros, or about £5.15, each.

This was posted in Bdaily's Members' News section by Martin Walker .